Ryan Cohen Escalates Bid for eBay Against Board

Key Moments

Hostile Takeover Threat Intensifies

Investing.com – GameStop CEO Ryan Cohen has renewed his warning that he is prepared to launch a hostile takeover attempt of eBay (NASDAQ:EBAY), following eBay’s decision earlier this week to turn down his acquisition proposal, the Financial Times reported on Wednesday.

According to the report, Cohen issued a new letter on Wednesday addressed to eBay board chair Paul Pressler, criticizing the company’s move to reject his unsolicited $125-per-share offer without engaging in meaningful discussions.

Cohen Targets eBay’s Board and Moves Toward Shareholders

The Financial Times reported that eBay’s board declined Cohen’s request for a meeting. In response, Cohen said he plans to bypass the board and bring his bid directly to eBay shareholders.

GameStop has built a 5% ownership position in eBay, a stake that gives Cohen a platform from which to pursue a hostile strategy.

Deal Structure and Valuation Snapshot

Earlier this month, GameStop, which has a market value of $10.3 billion, unveiled a cash-and-stock proposal to acquire eBay. The Financial Times reported that eBay is valued at more than four times GameStop’s market capitalization.

The rejected proposal was structured as an offer consisting of half cash and half stock.

eBay’s Rejection and Governance Concerns

On Tuesday, eBay rejected the bid, describing it as “neither credible nor attractive.” The company cited worries about how the transaction would be financed, the level of indebtedness a combined business might carry, and aspects of GameStop’s governance and executive compensation framework.

In his letter to eBay, Cohen countered by challenging eBay’s own governance and pay practices. He pointed to CEO Jamie Iannone’s compensation of $144 million over his six-year tenure while, at the same time, eBay’s active buyer count declined.